Construction Economic News

Employment falls nationally and in most metro areas; construction jobs, spending skid

April 4, 2009

Nonfarm payroll employment continued to decline sharply in March (-663,000, seasonally adjusted), bringing the 12-month decline to 4.8 million (-3.5%), the Bureau of Labor Statistics (BLS) reported on Friday.  The unemployment rate rose to 9.0%, not seasonally adjusted (8.5%, seasonally adjusted), from 5.2% a year ago. Construction remained in the vanguard, with job losses of 126,000 for the month and 928,000 (-12.5%) over 12 months. The 12-month decrease amounted to nearly one-fifth of all nonfarm job losses, although construction accounted for just one out of 20 jobs. The unemployment rate in construction, 21.1% in March, was the highest of any industry, and the 9-point increase (from 12.0% in March 2008) was the largest jump. Nevertheless, average hourly earnings in construction continued to outpace the overall economy, rising to $22.61 in March, seasonally adjusted, a gain of $1.03 (4.8%) over 12 months, compared to a rise of 3.4% for all private nonfarm production and nonsupervisory employees. Architectural and engineering services employment, a harbinger of demand for future construction, rose 0.2% in March but was down 2.2% over 12 months.

In a sign of how widespread the downturn has been, "unemployment rates [not seasonally adjusted] were higher in February than a year earlier in all 372 metropolitan areas," BLS reported on Wednesday. "Among the 310 metropolitan areas for which nonfarm payroll data were available, 270 areas recorded over-the-year employment decreases, 37 reported gains, and 3 had no change." The largest 12-month employment increase was recorded in Champaign-Urbana, Illinois, 3,600, followed by Killeen-Temple-Fort Hood, Texas, 2,500; Anchorage, Alaska, 2,400; Midland, Texas, 2,300; Odessa, Texas, 2,200; and Oklahoma City, 2,100. The largest over-the-year percentage increases in employment were reported in Odessa, 3.5%; Midland, 3.4%; Champaign-Urbana, 3.2%; Grand Junction, Colorado, 2.5%; and Blacksburg-Christiansburg-Radford, Virginia, 2.4%  Of the 38 metro areas with annual average employment levels above 750,000 in 2008, only Austin-Round Rock, Texas had a gain, 0.2%. Persistent job gains can signify construction opportunities.

Construction spending in February totaled $968 billion at a seasonally adjusted annual rate, down 0.9% from January and 10% from February 2008, the Census Bureau reported on Wednesday. Private residential construction fell 4.3% and 30%; private nonresidential rose 0.3% for the month but was down 0.2% compared to February 2008; and public construction rose 0.8% and 3.4%. Public construction is being boosted by federal construction spending, which grew 16% since February 2008. The federal increases probably stem from military base realignment work, flood-prevention projects in Louisiana, Mexican border security facilities and veterans care. Of the two largest public categories, educational construction spending climbed 1.7% in February and 9.0% year-over-year, while highway and street construction fell 0.5% for the month and rose 3.0% from a year earlier. The largest private nonresidential category in February was manufacturing construction, which jumped 4.1% and 64%; followed by commercial (retail, warehouse and farm), -1.9% and -23%; power (power plants, transmission lines, wind farms), -3.8% and 11%; office, 1.0% and -12%; health care, 2.1% and 5.7%; and lodging, 4.7% and -2.7%.

Construction spending under the American Recovery and Reinvestment Act (the "stimulus" bill) will show up in a variety of categories as either federal or state-local totals, depending which agency awards the contracts. News summaries such as AGC SmartBrief ( include articles nearly every day announcing project selections. For instance, on Tuesday, the General Services Administration listed $5.5 billion of projects it plans to undertake (posted at How quickly and where these show up in the Census figures on construction spending depends on how soon projects are actually awarded and the construction dollars are spent. One source of delay may arise from unavailability of U.S.-made materials, particularly for water, wastewater and wind-power projects. "Buy America" language in the Act appears ambiguous in such cases, and local officials and contractors are awaiting clarification. For instance, the Great Falls (Montana) Tribune reported on Thursday, "Conrad officials hope to use federal economic stimulus money to pay for at least part of a $4 million to $5 million project to replace the town's wastewater treatment plant. However, a provision in the federal act requiring that only U.S.-made materials be used might prevent them from tapping into the funds." AGC is asking contractors to report on contracts won and jobs saved, restored or created by going to or writing to

Lack of work and falling materials prices are pushing down bids. "California's poor economy has led to surprisingly low bids on transportation projects across the Bay Area and state, as construction companies fight for their business lives to capture whatever work they can," the San Jose Mercury News reported on Monday. "Dozens of firms are vying for work that in the past might draw interest from a handful. From major highway construction to small sidewalk improvements, bids are sometimes close to half as much as public works officials had projected."

New orders for U.S.-manufactured goods (excluding semiconductor manufacturing) rose 1.6% in February following six straight months of decreases, Census reported on Thursday. Orders for construction materials and supplies rose 1.6% but were down for the first two months of 2009 combined compared to January-February 2008. Orders for construction machinery, an extremely volatile series, soared 182% for the month but were off 44% year-to-date.